The Asian financial hub’s economy shrank 9% in the three months through June, compared to the same period a year earlier, according to preliminary figures released by the government Wednesday.
Despite last quarter’s terrible showing, the news could have been even worse: The plunge in Hong Kong’s GDP at least appears to be holding steady. Revised figures show that the economy also shrank about 9% in the first quarter of 2020, worse than initially reported.
“Hong Kong’s economy stabilized last quarter as fiscal stimulus and stronger demand in mainland China offset weaker consumption and investment,” wrote Martin Rasmussen, China economist for Capital Economics, in a research note Wednesday.
The Covid-19 pandemic and worsening China-US relation have added uncertainty to the global economic outlook. Hong Kong has become the latest flashpoint in the dispute between the world’s biggest economies after Beijing imposed a national security law on the city at the start of July.
“Together with the recent recurrence of the local epidemic, [these factors] suggest that it may take longer than originally expected for the local economy to recover,” Chan said.